IPTV set for phenomenal growth in APac: study

By SiliconIndia   |   Wednesday, 27 December 2006, 06:00 Hrs
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NEW DELHI: IPTV is all set to take a big leap in the Asia Pacific region. Buoyed by the growth it has seen and the emergent market trends in China, India and Australia, the Asia Pacific IPTV market revenues are projected to cross the $3-billion mark by 2013, from about $353.4 million in 2006. The Economic Times stated this today. Global consulting firm Frost & Sullivan, in its latest report surveying 12 major Asia Pacific markets such as Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan and Thailand, said that the revenue in the region is likely to close at $512.4 million next year.

Growing at a compound annual growth rate (CAGR) of 37.5 percent (2006-2013), the region's IPTV market is projected to be worth $3.3 billion by end-2013,the Frost & Sullivan report said.

According to the study, propelling the growth of IPTV in the region are dwindling wireline revenues, consumer demand for greater control over viewing preferences, and the explosion of broadband in various high growth markets across the Asia-Pacific. While service providers across the Asia-Pacific have invested heavily in the network infrastructure required to offer such services, the key success factor for IPTV would lie in the gamut of content that service providers are able to provide consumers, noted ET.

IPTV is the next notable wave in the consumer telecom space and service providers are planning to leverage this new technology to offer high quality interactive services to customers. While revenues from fixed line services continue to decline, IPTV is likely to reduce churn, increase ARPU (average revenue per user) levels, and generate revenue streams in the long term, Frost & Sullivan senior research analyst Aravind Venkatesh told ET. IPTV is currently available in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and Thailand, and is expected to be rolled out in India and the Philippines in 2007.

The report highlighted the immense potential of the Chinese market, given the country's largest broadband subscriber base in Asia-Pacific. Residential subscribers constitute about 70 percent of China's 47.8 million broadband subscribers. China, together with Hong Kong, which is said to be one of the most sophisticated IPTV markets in the world, is expected to account for nearly 60 percent of the region's IPTV revenues, the report further noted.

While initial response from end users has been positive, service providers face the challenge of procuring quality and regional content. Cable and satellite operators currently offer most of the said content.

The report said that the lack of sufficient bandwidth and highly skewed broadband distribution were major inhibitors for the growth of IPTV in Asia-Pacific. While Hong Kong, Korea, Singapore and Japan are mature markets for broadband, developing markets like China, India and Malaysia have dismally low broadband penetration.

The lack of bandwidth in developing markets requires the implementation of high compression codecs and watermarking technologies to achieve the expected quality of service levels. This may, however, be only a short-term solution. Service providers should scale their networks rapidly to offer bandwidth-hungry applications to consumers,reported ET, quoting the report.

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